SBI Q1 profit jumps 81% YoY to Rs 4,189 cr, moratorium declines to 9.5%

The country’s largest bank, State Bank of India, has posted 36.8 cent rise in profit before tax (PBT) at Rs 5,559.7 crore for the quarter ended June 2020 (Q1FY21) on robust growth in net interest income.

SBI reported standalone net profit of Rs 4,189.34 crore for June quarter of FY21 (Q1FY21) on Friday, supported by a one-time gain from stake sale in SBI Life for Rs 1,539.73 crore. This was 81.18 per cent higher than the Rs 2,312.2 crore net profit reported in the June quarter of FY20. On a quarterly basis, the net profit grew 17 per cent from Rs 3,580.8 crore reported in March quarter of FY20.

“Exceptional items for quarter ended June 30, 2020 represent profit of Rs 1,539.73 crore on sale of certain portion of investment in bank's subsidiary SBI Life lnsurance Company Limited,” said the bank in a statement.

On a consolidated basis, the net profit came in at Rs 4,776.5 crore, up 61.88 per cent YoY, from Rs 2,950.5 crore reported in Q1FY20.

The numbers beat Street estimates by a huge margin. Centrum Broking, for instance, saw the net profit at Rs 3,796.9 crore, while Emkay Global Financial Services pegged it at Rs 3,155.6 crore. Those at HDFC Securities, meanwhile, estimated the net profit at Rs 3,330 crore.  CLICK HERE TO READ WHAT ANALYSTS HAD EXPECTED

The bank's operating profit increased by 36.35 per cent on a yearly basis to Rs. 18,061 crore in Q1FY21 from Rs 13,246 crore in Q1FY20.

Besides, the public sector bank’s net interest income (NII) – the difference between interest earned and expended – came in at Rs 26,641.6 crore, clocking a 16.1 per cent growth on a yearly basis from Rs 22,938.8 crore. The same was Rs 22,766.9 crore in Q4FY20. Domestic Net Interest Margin (NIM) improved to 3.24 per cent in Q1FY21, registering an increase of 23 bps YoY.

Provisions and slippages

The bank created total provisions worth Rs 12,501.30 crore during the quarter under review, of which provisions for NPA stood at Rs 9,420.46 crore. Total provision at the end of Q1FY20 was Rs9,182.94 crorw. Sequentially, the total provision declined 28.4 per cent from Rs 18,495.08 crore at the end of Q4FY20.

“During quarter one of FY2020- 21, the bank has made an additional provision of Rs 1,836 crore on account of Covid-19 related accounts. The provision of Rs 3,008 crore is held by the bank on Covid-19 related accounts as on June 30, 2020,” the bank said in a statement.

Provision Coverage Ratio as on June 30, 2020 was 86.32 per cent.

It further said, for the accounts covered under the provisions of lnsolvency and Bankruptcy Code (lBC), the Bank is holding total provision of Rs 5,835.29 crore (95.67 per cent of total outstanding) as on June 30, 2020.

As regards slippages, the bank reported fresh slippages at Rs 3,637 crore, down from Rs 8,101 crore reported in Q4FY20. 

Asset quality and moratorium

The bank said its loans under moratorium was 9.5 per cent at the end of June, 2020 quarter compared with 23 per cent at the end of March quarter of FY20.

The asset quality, therefore, improved on a sequential basis. The gross non-performing assets (GNPA) were Rs 1.29 lakh crore, down from Rs 1.49 lakh crore reported in Q4FY20. In percentage terms, GNPA ratio improved by 71 bps QoQ to 5.44 per cent from 6.15 per cent in Q4FY20.

Net NPA (NNPA), on the other hand, were Rs 42,703 crore, down from Rs 51,871.3 crore in Q4FY20. The ratio was 1.86 per cent, down 37 bps QoQ.

Loan and Deposits

The bank said its total deposits grew at 15.96 per cent YoY during the quarter under review, out of which Current Account Deposit grew by 12.98 per cent YoY, while Saving Bank Deposits grew by 17.29 per cent YoY. That apart, Home loan, which constitutes 22 per cent of the bank’s domestic advances, grew by 10.72 per cent YoY.

Credit Growth, meanwhile, stood at 6.58 per cent YoY, mainly driven by Retail (Personal) Advances (12.85 per cent YoY) and Foreign Office Advances (11.19 per cent YoY). 

The stock closed 2.6 per cent higher at Rs 191.45 apiece on the BSE on Friday, as against 129 points, or 0.34 per cent, decline in the benchmark S&P BSE Sensex. The stock had touched an intra-day high of Rs 195, up 4.5 per cent, on the BSE soon after the result announcement.

Source: Bank's financial statement